The ability of shipping to provide cost-effective and efficient long-distance transportation places it at the heart of the global economy.
Each year, ships transport approximately 11 billion tons of goods. Based on the current global population, this equates to an impressive 1.5 tons per person. The ability of shipping to transport goods and materials from their point of origin to their final destination underpins modern life.
Shipping accounts for 80 per cent of total exports and imports by volume and 50 per cent by value for an economic region like the European Union.
The total value of the annual global shipping trade had surpassed 14 trillion US dollars as of 2019.
Assisting in the housing, relocation, and feeding of populations
The shipping industry moves nearly 2 billion tons of crude oil, 1 billion tons of iron ore (the raw material used to make steel), and 350 million tons of grain each year. By road, rail, or air, these shipments would be impossible.
Such raw materials enable countries to develop industries, build cities, house and relocate populations, and refine re-export resources. This ability to add value fuels growth and allows developing countries to expand.
Other important products, such as chemicals, refined fuels, and manufactured goods, are also shipped by sea in large quantities.
Shipping has developed highly sophisticated logistics chains that deliver just-in-time parts and goods to manufacturers and consumers to support global economies. Avocados, for example, are shipped from Chile to Europe at the peak of ripeness.
A cup of coffee costs 0.3p to send.
Shipping is also the most cost-effective mode of transportation per ton, contributing only 0.3p to the £2.50 price of a cup of coffee, 20p to the £5 price of a bottle of wine, and $5 to the $100 price of a Nike trainer.
This emphasizes shipping's ability to transport goods in large quantities for a low cost and with a low environmental impact.
Seaborne trade has quadrupled in size over the last four decades, benefiting consumers worldwide through competitive freight rates.
Shipping benefits
- Countries can access the raw materials they need to develop their economies through shipping.
- Allows for the production and export of low-cost goods and products.
- On a per-ton basis, it has the smallest environmental footprint in the transportation segment.
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